From Yahoo Finance: 2025-03-30 09:01:00

Many retirees face the harsh reality of not being able to retire at all, let alone retire broke. The journey to retirement reveals ugly truths about financial preparation. Experts warn that $1 million may not last long in high-cost-of-living states. Only 38% of workers estimate monthly retirement income needs, emphasizing the importance of financial planning.

Retirees often spend 80-90% of pre-retirement expenses, requiring savings to generate sufficient income. Failure to calculate monthly expenses may lead to financial strain in retirement, necessitating adjustments to spending habits. Unexpected tax bills on retirement income can be higher than anticipated, especially for distributions from tax-deferred accounts.

To reduce tax burden, consider saving in tax-free accounts like Roth IRAs or Roth 401(k)s. Accessing savings tax-free can help retirees keep more of their money. Inflation must also be factored into retirement income needs, as rising costs erode purchasing power over time. Investing in assets with higher returns can help combat inflation and ensure financial stability in retirement. To ensure your savings continue to grow in retirement, keep stocks or mutual funds in your portfolio. The average life expectancy in the U.S. is 77, but 1 in 5 65-year-olds will live past 90. Consider long-term care costs – the median annual cost for assisted living is $54,000. Healthcare in retirement is crucial, with a 65-year-old couple needing $315,000 for medical expenses. Consider working longer for subsidized health insurance or contributing to a health savings account. Social Security alone may not be enough in retirement, so build savings and delay claiming benefits for a higher payout. Planning for retirement involves more than just financial preparation. Finding ways to stay relevant and impactful in your golden years is crucial. Making a bucket list of activities you’ve always wanted to do can prevent boredom and provide satisfaction. Working in retirement can offer financial benefits, ward off boredom, and provide a sense of purpose. Consider exploring senior-friendly jobs or the gig economy for flexibility and fulfillment. Parents who haven’t planned for retirement may end up relying on their adult children for financial support. To avoid this, stop giving financial handouts and focus on saving for your own retirement. Breaking out of a frugal mindset after retirement can be difficult for those who have diligently saved. Develop a budget based on your assets and retirement income sources to avoid feeling guilty about spending your savings. Ensure you have a diversified retirement savings plan to avoid unnecessary required minimum distributions and tax penalties. Saving in a Roth IRA can provide flexibility in retirement withdrawals. When you retire, consider converting your Roth 401k to a Roth IRA, advised Geary. Moving to a cheaper location may seem like a good financial choice, but it can backfire. Rent in a potential new city before committing, suggested LaBrecque. Be mindful of budget differences with friends in retirement, recommends Sullivan. 1. The unemployment rate in the United States has dropped to 4.2% in November, marking the lowest level since March 2020. The economy added 210,000 jobs last month, beating expectations and signaling a strong recovery from the pandemic-induced recession.

2. Inflation in the Eurozone has surged to 4.9% in November, the highest level in over a decade. Rising energy prices and supply chain disruptions have contributed to the increase, posing challenges for the European Central Bank’s efforts to stabilize prices and support economic growth.

3. Tesla has announced plans to build a new Gigafactory in Texas, which is expected to create 5,000 jobs and produce the Cybertruck and Model Y vehicles. The company aims to ramp up production to meet growing demand for electric vehicles and expand its presence in the US market.

4. The COP26 climate summit concluded with nearly 200 countries agreeing to accelerate efforts to reduce greenhouse gas emissions and limit global warming to 1.5 degrees Celsius. The Glasgow Climate Pact includes commitments to phase out coal, boost renewable energy, and provide financial support to vulnerable nations.

5. Facebook parent company Meta has announced a rebranding to focus on the metaverse, a virtual reality space for social interaction and digital experiences. CEO Mark Zuckerberg outlined plans to invest $10 billion in metaverse development over the next several years, signaling a shift towards immersive online platforms.



Read more at Yahoo Finance: The Downsides of Retirement That Nobody Talks About